On June 5, 2024, Novelis announced that it deferred the initial public offering due to market conditions for an indefinite time. It said the company would evaluate the situation and decide on a suitable time for rolling out the offering.
According to a report last week, Novelis was targeting to achieve a market valuation of up to $12.6 billion in its US IPO under the symbol “NVL”. This IPO aims is to raise $945 million by selling 45 million shares for $18-21 each.
The proposed IPO was an offer for sale by the existing promoter Hindalco Industries. After the completion of the IPO, Hindalco will reduce its stake in Novelis by 7.5 per cent and retain almost 92.5 per cent of the ownership, owning 555 million shares of Novelis’ common shares.
When Hindalco bought Novelis in 2007, the latter’s market value was $6 billion. After owning Novelis, Hindalco delisted it from the US exchanges.
With foresightedness that the long-term demand for flat-rolled aluminium products would remain strong, Novelis realised the potential opportunity of raising $6 billion in investments to grow the business. Novelis is determined to increase capacity aligned with sustainability commitments.
Novelis is building a recycling and rolling plant in Bay Minette, Alabama, for which the costs escalated by 65 per cent to $4.1 billion from $2.5 billion. The plant will serve the beverage packaging and automotive industries with its flat-rolled products. It will also recycle beverage cans by adding a new recycling centre that will increase the company’s recycling capacity by 15 billion cans per annum.
In Q4 2024, Novelis reported revenue of $4.1 billion, which was 7 per cent less than $4.4 billion in the previous year. However, its net income from continuing operations grew year-on-year by 2 per cent, standing at $179 million during Q4.
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